RightNow’s Engine Of Growth

2010 has been an exciting year for RightNow.  We have seen a dramatic acceleration in our revenue growth rate and we see a promising future ahead.  In Q3 we saw total revenue growth of 25% Y/Y and recurring revenue growth of 30% Y/Y making us one of the fastest growing public SaaS firms.

I believe there are three major forces driving this acceleration in revenue growth:

1. Market mega-trends influencing our business
2. Our internal growth initiatives
3. Best of All: Customer success

Market Mega-Trends Influencing our Business

As we discussed at our October Analyst Day, there are four market mega-trends driving our revenue growth acceleration:

1. Consumer Empowerment – Consumers have been empowered like never before by the Internet and have become less and less tolerant of poor customer experiences. Consumer companies realize they must take customer experience seriously as it is the only sustainable differentiator left in our highly competitive global markets.  RightNow has spent the last 10+ years building the industry’s most robust solution suite for customer experience and as a result we are the market leader in helping high-volume consumer businesses differentiate based on customer experience.
2. Cloud Computing – There is a tectonic shift underway from on-premise software to cloud based software.  We are benefiting because cloud based solutions implement faster, cost less to own and are more reliable. In our core markets, for example contact center, this shift to the Cloud has just begun.
3. Proliferation of Online Interactions – Social media and mobile devices are changing the way consumers interact with each other and with businesses.  The result is a massive expansion in the number of interactions from and between consumers occurring each day.   We are at the heart of these interactions as we help the world’s leading consumer brands make sense and stay engaged with their consumers.  As more consumer interactions occur, RightNow creates more value for our customers.
4. Contact Center Replacements – Legacy on-premise contact center solutions like Siebel, Remedy, Vantive and Clarify are at end of life.  They do not support multi-channel support well, they do not facilitate outsourcing well and they do not integrate social channels or mobile channels well.  Plus, most have not been updated for years. A leading industry analyst recently told me, “I get calls almost daily from frustrated Siebel customers wanting to know what their alternatives are.”  This shift is also driving growth for RightNow.

Our Internal Growth Initiatives

RightNow has spent the last decade investing to build the most robust customer experience solution in the market.  We have accomplished our goal as recognized by Gartner and others.  Now our investment focus is shifting to aggressively build out sales and marketing capacity to further accelerate our growth.  Not that we will ignore solution R&D, just that our focus for incremental investment with be focused on sales and marketing capacity.  We believe that the huge solution investments we have made over the last decade combined with the mega-trends highlighted earlier, create a massive opportunity that is uniquely ours and one we must act on swiftly.

As we also discussed at our analyst day, our incremental sales and marketing investments will include:

• More direct sales reps
• Increased marketing program dollars
• Expanded indirect channel sales
• Extended vertical industry focus

These efforts started during 2010 and are already bearing initial fruit.  For example, we introduced the Cloud Service Agreement (CSA) which has increased the efficiency of our sales organization (by giving customers what they wanted in a standard contract we believe we shortened our sales cycles) and we added Client Success Managers (CSMs) to ensure customers are happy and willing to buy more.

With these sales and marketing investments we are laying the groundwork for years of sustainable and profitable growth to ensure we will be here to continue to lead the customer experience industry.

Best of All: Customer Success

I am continually awed by the impact we have for our clients and the success they enjoy with our solutions.  Few things are as gratifying as seeing our customers win industry recognition and succeed in the marketplace because of our solutions.

Having just come from our fall user conferences, many of our customers’ stories are still fresh in my mind:

• Orbitz is receiving an 833% ROI
• British Airways is seeing increases in customer satisfaction
• Nikon is supporting their customers more effectively  in over 50 countries
• DeVry University is improving student services to help minimize attrition

All in all, I have never been more excited about the opportunity we have in front of us or our growth prospects for 2011 and beyond.